【英文】HSBC报告：中国餐馆与食品：火锅巨头海底捞即将降温（96页）

After the COVID-19 outbreak in early 2020, many restaurant companies closed stores by the  end of January. They started to resume dine-in services in the second week of March. Generally  speaking, they lost a month of sales.  The market appears to be looking beyond COVID-19 and share prices have returned to preoutbreak levels and some have even pushed higher. For example, Yihai is up 86% y-t-d after its instant hot pot products enjoyed brisk sales (we estimate 1H20e revenue was up by 24% y-o-y) during the lockdown.While revenue is split equally between two brands – Jiumaojiu (northwestern Chinese cuisine)  and Tai Er (Chinese spicy fish, known as sauerkraut fish, a very popular dish in traditional  Sichuan cuisine), Tai Er is the main revenue and profit driver. The first Tai Er restaurant was  opened in 2015 and the new brand delivered a revenue CAGR of 166% over 2016-19. 

In 2019, with 126 restaurants Tai Er accounted for 47% of the group’s revenue. As we discuss in the  chapter “Two pathways to scalability”, we believe the Tai Er brand has developed its own formula to scale up and it can maintain strong momentum from a low base, supported by the  capital raised from the IPO. We expect Jiumaojiu’s adjusted net profit to grow at a CAGR of  51% over 2019-22e on a 34% CAGR in revenue (consensus is irrelevant as a recent listing). We initiate with a Buy rating and a TP of HKD16.90 using a DCF model with a WACC of 9.5%  and terminal growth rate of 2.0%. Our TP implies 2021e PE of 41.3x and EV/EBITDA of 15.3x. Yihai (1579 HK, TP HKD116.40, CMP HKD95.25, Buy) Yihai started out as the main supplier of hot pot condiments to its related party, Haidilao, but  later grew its market share in the retail market for these products, other Chinese compound  condiments and instant hot pot. We believe the company can further re-rate due to its potential  to grow retail market share for Chinese compound condiments and instant food. We forecast a  2019-22e net profit CAGR of 30.3% based on a 29.8% revenue CAGR (in-line with consensus). We initiate with a Buy rating and a TP of HKD116.4 using a DCF model with a WACC of 7.5%  and terminal growth rate of 3.5%. Our TP implies a 2021e PE of 77.1x.